Australia does not literally have a residence by property investment program. However, it may be possible to purchase a commercial or residential property for the 188A Visa for use as a business, but not with a loan. To be eligible for Australian permanent residence, the applicant must meet the eligibility criteria on the merits of their background and qualifications, or based on their relationship with a partner or family member. In certain EU countries, it is possible to buy property (real estate) to qualify for the golden residence permit, in countries, such as Greece, Portugal, Spain, Cyprus and Malta.
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How can foreigners apply for loans to purchase properties in Australia to gain residency?
Can I use such loans to buy property and then apply for one of the residency programs?
Investors can invest on commercial real estate in addition to other types of investments that are also required for migration purposes. Direct investment into residential real estate for migration purposes is prohibited. Indirect investment in residential property through managed funds is strictly limited. You will be asked to indicate which of your assets you plan to use to fund your investment in Australia for migration purposes. You also need to present evidence of the value of your assets and liabilities and evidence of your ownership of them to meet the investment requirements. When you take a loan, the lending banker will have a lien on the property, so it would be a liability when calculating your assets and, therefore, would not meet the requirements.
Australia has two investor visas and both of these require investments to be made in industry funds only, not directly in real estate. For both investor streams (AU$2.5 million and AU$5 million), the investment is made up on 20% in a venture capital fund, 30% public share fund (emerging companies) and remaining 50% in a balancing fund. There may be options to invest in REITS or commercial property within the funds. For both visa streams, the funds used to make the investment cannot be encumbered. This means loans generally cannot be used to fund the investment. There is a policy exception to this where the investor owns assets and a loan is drawn against those assets as collateral and the funds from the loan are used to make the investment in Australia. As mentioned the investment must be in the fund structures mentioned, there is no other option. An alternative is New Zealand (minimum investment is NZ$2.5 million) which allows for investment to be in commercial properties and resident real estate (provided it's a new development). However, loans cannot be used to fund the investment.
Purchasing property in Australia will not help you to gain residency. The Significant Investor 188C visa involves investing into complying investments with the assistance of a fund manager who is a ASIC Registered Financial Adviser. Any balancing investment in residential real property (whether direct or indirect through a debt or equity instrument, or a derivative) must restrict its exposure to residential real property investments to no more than 10% of the value of the managed investment fund’s net assets. The residential real property investment must not be made for the dominant purpose of deriving financial benefits, including assisting the applicant, their spouse or de facto partner or any other member of the applicant’s family unit or their spouse or de facto partner’s family unit, to reside in or gain legal ownership in Australian residential real property. No managed investment fund is permitted to use an applicant’s contributions as security or collateral for a loan.